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Rand weaker in midday trade

Johannesburg – The rand remained weaker in midday trade‚ as markets adopted a wait-and-see attitude ahead of the expected ECB rate cut announcement this afternoon.

“The market is waiting patiently for the big announcement this afternoon from the ECB and the Bank of England. The rand will react to the euro movement when it happens‚ until then we are trading in narrow ranges‚” a local trader said.

At 11:52‚ the rand was bid at R8.1598 to the dollar from its previous close of R8.1304.It was bid at R10.1974 to the euro from its previous close of R10.1752 and at R12.6980 against sterling from R12.6713 before.

The euro was bid at $1.2504 from its previous close of $1.2518.

Standard Bank said expectations of a cut from the ECB and further quantitative easing from the BoE had supported a revival in risk appetite over the last week.

The bank‚ however‚ cautioned that while it saw scope for a further surge in risk appetite if the central banks deliver on expectations‚ the market’s optimism was likely to be tempered by growth concerns.

Meanwhile‚ Dow Jones Newswires reported that according to Citi the euro was down on the Spanish auction - this after Spain managed to sell the EUR3bn it was targeting across 3 lines of Bonos. "But fixed income sources say the auctions weren't great and had long tails‚" said the bank. It sold EUR1.239bn in the 3y (bid/cover 2.3 vs 3.01) last time; EUR1.015bn in the 4y (bid cover 3.57 vs 3.16) and EUR747 million in the 10y (bid/cover 3.2 vs 3.29)‚ said the bank. As a consequence‚ EUR/USD has subsequently moved down around 20 pips as a result‚ Citi added.
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Rand - Dollar
18.91
+0.1%
Rand - Pound
23.87
+0.1%
Rand - Euro
20.37
+0.3%
Rand - Aus dollar
12.31
+0.2%
Rand - Yen
0.12
+0.2%
Platinum
908.05
0.0%
Palladium
1,014.94
0.0%
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2,232.75
-0.0%
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24.95
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